pcNewsWire – City of Toronto has made a $250 million equity investment in Toronto Hydro Corporation in return for 200 common shares of Toronto Hydro.
City of the Toronto, the sole shareholder of Toronto Hydro, owns all 1,200 common shares. The book value of shareholder equity in the consolidated financial statements of Toronto Hydro as at March 31, 2017 was $1.462 billion.
News Release
Toronto Hydro receives $250 million equity investment from City of Toronto
Toronto Hydro receives $250 million equity investment from City of Toronto. (CNW Group/Toronto Hydro Corporation)
Company declares dividend and amends Dividend Policy
TORONTO, June 28, 2017 /CNW/ – Toronto Hydro Corporation (Toronto Hydro) announced today that it has received an equity investment of $250 million from the City of Toronto (City) and has issued to the City an additional 200 common shares. The City continues to be the sole shareholder of Toronto Hydro, with a total of 1,200 common shares outstanding. The book value of shareholder equity in the consolidated financial statements of Toronto Hydro as at March 31, 2017 was $1,462.2 million.
In December 2016, Toronto city council approved making such investment in order to provide support for Toronto Hydro’s credit rating and balance sheet strength, and to restore and enhance its capacity to pay dividends to the City.
In connection with receipt of such investment, Toronto Hydro’s Board of Directors also declared certain dividends payable to the City and approved amendments to Toronto Hydro’s Dividend Policy, which is summarized as follows:
(a) In respect of fiscal 2017, an aggregate amount of $75 million shall be paid to the City, consisting of two previously declared installments of $6.25 million (one of which had been paid on March 31, 2017 and the other payable on June 30, 2017), and $62.5 million payable within 10 days of Toronto Hydro’s receipt of the above-noted investment (by July 8, 2017)
(b) In respect of fiscal 2018 and subsequent fiscal years, 60% of Toronto Hydro’s immediately previous fiscal year’s annual consolidated net income shall be payable to the City in four equal installments on the last business day of each fiscal quarter
The revised Dividend Policy will be set out in further detail — including that any dividends will be subject to restrictions imposed by law and the Shareholder Direction — through an amendment of the City of Toronto’s Shareholder Direction to Toronto Hydro, which includes the company’s former Dividend Policy. These changes also supersede Toronto Hydro’s decision announced in November 2016 that it would reduce dividend payments to the City to $25 million per year until further notice.
QUOTE
“As we continue to invest heavily in renewing Toronto Hydro’s aging infrastructure to address safety, reliability and customer service requirements, we need a flexible, balanced capital structure. This investment better enables us to make these investments while restoring a strong dividend for our sole shareholder, the City of Toronto.”
— Anthony Haines, President and CEO
ABOUT TORONTO HYDRO
The Corporation is a holding company which wholly owns two subsidiaries:
Toronto Hydro-Electric System Limited (THESL) – distributes electricity and engages in conservation and demand management activities
Toronto Hydro Energy Services Inc. – provides street lighting and expressway lighting services in the city of Toronto
The principal business of the Corporation and its subsidiaries is the distribution of electricity by THESL, which owns and operates the electricity distribution system for Canada’s largest city. A leader in conservation and demand management, it has 764,000 customers located in the city of Toronto and distributes approximately 18% of the electricity consumed in Ontario.
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SOURCE Toronto Hydro Corporation
For further information: Tori Gass, Communications and Public Relations, 416-903-4037, media@torontohydro.com; 24-hour media line: 416-903-6845, media@torontohydro.com
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